The NHS is a national treasure. It's one of the few health services in the world where everyone is guaranteed free treatment whenever they need it. It's been well documented that the Commonwealth Fund recently rated healthcare in the UK as the most equitable of several OECD countries. It's why so many people are concerned that the health and social care bill will create a US-style health system, where a family can be forced to take out a loan against their house to pay for a bill of $180,000 after their nine-month-old son spent 18 days in hospital being treated for a brain aneurysm.

In truth, there is nothing in our proposals that would allow this nightmare to become a reality. The NHS will remain a universal healthcare service free at the point of use, based on need not means. But given the strength of feeling towards the NHS, it's understandable that people want more words and deeds to demonstrate our commitment to William Beveridge's founding principles of the NHS. They want evidence that the government won't allow US health corporations to exploit our proposals to manipulate the NHS into a private healthcare system. We've listened to these concerns and we've acted.

As a result of legislation introduced by Labour, ministers already have complete freedom to introduce price competition now. That is why we are making amendments to the health and social care bill that will finally close Labour's loophole by preventing private providers from being paid more than those from the public sector and ensuring that competition in the NHS is based on quality, not price. In doing so, we've rejected the approach the last government took in setting up independent sector treatment centres, setting an arbitrary percentage of services that had to be run by the private sector, with guaranteed volume levels that allowed them to cherry-pick easy cases. Instead patients will be able to choose on the basis of quality who provides that treatment, but without guarantees for providers.

At present, many parts of the NHS are subject to competitive tendering on cost and volume. Mental health, for example, is contracted in this way. Our plans to extend the use of fixed-price tariffs to more areas of healthcare will end competition on price, replacing it with competition on quality. Increasingly under our plans, no provider – public, voluntary or private – will be able to offer a service unless it meets NHS quality standards and works at NHS prices.

The deathbed conversion of the last Labour government to the NHS as the "preferred provider", in a desperate attempt to appease the unions in the dying days of Gordon Brown's time as prime minister, prevented patients from exercising choice over their treatment. Voluntary groups were excluded from offering services to patients, even where they offered better outcomes. Charities such as Addaction, which provide drugs recovery support programmes at a cost over seven months of £1,700 – but where the programmes themselves save the state £20,000 – were prevented from competing fairly. Under our plans, we will extend the opportunities for charities and social enterprises to offer services to NHS patients rather than exclude them.

The Liberal Democrats have consistently championed the need for providers to operate on a level playing field. Norman Lamb's 2010 publication entitled The NHS: A Liberal Blueprint called for an end to the state monopoly of provision and the creation of a mixed economy with competition between providers and real choice for patients.

At the last general election, the Liberal Democrats stood on a manifesto commitment to "commission services for local people from a range of providers on the basis of a level playing field". Introducing "any willing provider" will ensure that instead of a "like it or lump it" health service, patients will be given the power to choose the best possible treatment for them. Instead of offering you just one treatment, you'll be given a choice from a range of NHS quality-assured health providers. Most of the time it will probably be from the NHS, but if a charity or even a private provider can offer you better care then under our changes you'll be free to go there. Each provider will be paid the same price, so your choice will be based on quality, not price.

The NHS will always be there for everyone, free of charge. That will never change. Our goal is simple: to update the NHS to give every patient the best possible care by trusting family doctors to work with local people to decide, design and deliver the right health services to meet local need and deliver world-class healthcare.